The Degree of Care in Luxury Wares by Vivek Jayaram

“Know your client, know the brand, and know the audience.”

Trademark infringement cases are largely about consumer confusion. Did a defendant’s use of its mark confuse consumers into thinking they were some other brand, or possibly affiliated with another brand? These are generally the questions that a judge or jury ask when confronted by a trademark infringement case. 

And, as any trademark lawyer can tell you, confusion is determined by looking at a buffet of factors: the similarity of the marks, the similarity of the goods and services, whether there was any actual confusion or intent to benefit from the plaintiff’s goodwill, whether the parties market in the same way or to the same kinds of consumers. You get the idea. There’s a long list of factors that, depending on where your case is taking place in the U.S., are supposed to be contemplated when figuring out whether there’s any likelihood of confusion in the marketplace. 

There’s one factor that, in my experience, at least, is often overlooked. It’s a factor that helped us win a federal trademark jury trial in San Francisco last year, and it happens to be the factor that I think is particularly important in cases involving luxury goods. The factor is the degree of care exercised by consumers when making their purchasing decision. 

In law school, some professors explain it like this: consumers are going to pay more attention, conduct more diligence, and take more time before purchasing something like an airplane than the time, care, and diligence they exercise in buying a Snickers bar at the grocery store. The idea is that the more expensive or technical the product or service, the less likely that a consumer will be confused because they spend more time, effort, and care in sussing out the purchase to begin with, as opposed to that Snickers bar you may impulsively buy in your Publix or Wegman’s check out aisle. 

So when adidas — that brand of 3-stripe, Yeezy, and lower case “a” fame — opposed Thom Browne’s trademark application in 2018 for its Grosgrain Signature – a red, white and blue-stripe logo – many of us who spend an inordinate amount of time in fashion were surprised. 

How could any consumer buy a pair of Thom Browne joggers for nearly $1,000 and think they were buying adidas, or that there was some affiliation between the two brands? 

It just didn’t add up. People who stroll around Dover Street Market, SoHo, or Miami’s Design District know what they’re looking for, and generally know what they’re looking at at any given time. In other words, Browne’s consumers are selective, and exercise a high degree of care when they’re shopping for luxury wares. 

After Browne refused to settle the opposition, adidas filed suit in 2021 in federal court in Manhattan. Adidas specifically claimed that Thom Browne was “selling athletic-style apparel and footwear featuring two, three or four parallel stripes in a manner that is confusingly similar to adidas’ three-stripe mark,” and sought nearly $8 million in damages (mainly a disgorgement of TB’s profits). Adidas’ main argument was that Thom Browne’s use of the four-stripes was likely to cause consumer confusion since the stripes appeared to be the same as adidas when viewed on social media, e-commerce sites, store racks, or even to the eye of the general public. 

Adidas did not allege that a customer spending $3,000 on a Thom Browne cashmere sweatshirt with stripes would think they were buying an adidas sweater. But they argued that if the apparel was not clearly identified as Thom Browne on social media, or when being worn in public, there was a risk of confusion. 

Despite fighting a long and expensive court battle for over two years, adidas lost at trial. The jury concluded that there was no likelihood of confusion. 

Although the jury is not required to provide a reasoning for its decision, it’s hard to imagine that the degree of care factor did not play a huge role in this verdict. The universe of people willing to drop a stack on a pair of sweats, or a few stacks on a sweater, is extremely small. These people are serious about their clothing, and will spend a lot of time examining a product before spending a lot of money on that same product. And because these consumers are discriminating, you can imagine that they know what they’re buying – they’re not making mistakes. It’s the same reason Honda and Hyundai can exist: cars are expensive, and consumers exercise care before buying one. 

Last year, we saved a company’s name by implementing a trial strategy all around the degree of care factor. 

In that case, my partner Liz Austermuehle, colleague Palak Patel, and I represented Fortanix, an Intel-backed cybersecurity company in Silicon Valley. They were sued by the industry leader and $5 billion a year behemoth, Fortinet, who also sold cybersecurity solutions to major corporations around the world. 

The case basically came down to this: arguably similar names, arguably similar products, but no real evidence of confusion. Yet, Fortinet was convinced a jury would see it their way. I, on the other hand, was pretty confident that we had a strong defense. 

Why? Because, as we learned during discovery and were able to show at trial, these products were not only really expensive (hundreds of thousands of dollars), the products couldn’t really be purchased until several C-suite members signed off on it, and the product was tested in the customer environment for weeks or even months! The evidence at trial showed that the average sales cycle took many months to sometimes over a year. 

As we cross-examined Fortinet’s witnesses at trial, I think it became clear to the jury why the degree of care factor exists in trademark law. There was no way that these customers — executives at the largest companies in the world — would spend months of their time and hundreds of thousands of dollars researching a product, only to learn that they bought the wrong brand. Really unlikely. 

Back to adidas, who only a few weeks ago went back to federal court in Manhattan to reopen its grievances against Thom Browne. Adidas says that 7 months after it lost at trial in a separate trademark dispute, it was provided internal Thom Browne emails where certain employees raised concerns about a likelihood of confusion between the brands’ marks. These kinds of emails get lawyers excited, no doubt, but it’s unlikely that there’s enough there to try the case again. The jury made its decision after reviewing adidas’ consumer survey that claimed that 26% of people would find confusion or some affiliation between the brands. It’s unlikely that a few internal emails would have demanded a different result by the jury. 

Each year, it seems like fast fashion is getting faster, and luxury fashion more luxurious. Know your client, know the brand, and know the audience. If you’re a brand itching to send a cease and desist to someone who sells products at a high price point, think about the degree of care those consumers exercise when buying products from that other brand. 

This doesn’t mean that high prices render someone immune to a claim of infringement. But it reinforces the basic principle that many litigants forget as they traverse through a trademark litigation: these cases are all about consumer confusion. If marks and products are similar, but the products are tested or priced so that it’s just not likely that a consumer will ultimately be confused, spend your dollars and your drive elsewhere.